Welcome to the latest edition of Arent Fox’s This Week in Telecom, our weekly newsletter designed to keep you apprised of recent developments in telecommunications policy, legislation, and litigation.

Federal Communications Commission (FCC) Announcements

  • The Tentative Agenda for the next FCC Open Meeting on July 19, 2013, contains four items, including a Report and Order regarding Telecommunications Relay Service and a Notice of Proposed Rulemaking proposing to update the E-Rate Program for high-speed broadband service. To read the full Tentative Agenda, click here.

The Mobile Market

  • EXTENSION GRANTED: In response to a request from Minority Media and Telecommunications Council (MMTC), the Wireless Telecommunications Bureau has extended the deadline to file reply comments in response to the Bureau’s Public Notice seeking comment on the state of competition in the mobile marketplace. The Bureau is particularly interested in receiving comments on the role minority and women-owned enterprises play in shaping competition in the mobile wireless marketplace. The new deadline is July 25, 2013. The notice of the extended deadline is available here. The related notices are available here and here.
  • The FCC Notice of Proposed Rulemaking on contraband cellphones in prisons has been published in the Federal Register. Comments are due July 18, 2013, and Reply Comments are due August 2, 2013. In the NPRM, the FCC states that “[p]risoners’ use of contraband wireless devices to engage in criminal activity is a serious threat to the safety of prison employees, other prisoners, and the general public.” The proposed rules would make it easier for correctional facilities to enter into leases or spectrum management agreements, allowing them to control which wireless devices were able to access the network. In addition, the proposed rules would “require wireless providers to terminate service, if technically feasible, to a contraband wireless device if an authorized correctional facility official notifies the wireless provider of the presence of the contraband wireless device”. The Commission also invites comment on “other technological approaches for addressing the problem of contraband wireless device usage in correctional facilities.” The NPRM is available here. GN Docket No. 13-111; ET Docket No. 08-73; WT Docket No. 10-4.

Federal Trade Commission (FTC) and Privacy Regulation

  • On July 10, 2013, Lois Greisman, Associate Director of the FTC Division of Marketing Practices, testified before the U.S. Senate Subcommittee on Consumer Protection, Product Safety, and Insurance regarding illegal robocalls and the agency’s enforcement of the Do Not Call Registry. Pointing to the fact that the Do Not Call Registry now contains more than 221 million phone numbers, Ms. Greisman stated that the program has been a great success and that the agency has been aggressive in enforcing the program’s regulations. She also noted that the FTC has sought “to spur innovative technological solutions to block unlawful telemarketing calls” through workshops and its recent “Robocall Challenge”. Ms. Greisman further testified that, despite the success of the Do Not Call Registry, illegal telemarketing robocalls continue to be a problem and, as a result, “the FTC is using every tool at its disposal to fight them.” The Associate Director's prefiled written testimony is available here.
  • The FTC is seeking public comment on proposed amendments to strengthen the Telemarketing Sales Rule (TSR) protections against fraudulent charges and services. In particular, the FTC seeks to curtail the use of a number of payment methods favored by unscrupulous entities, including (i) “stop[ping] telemarketers from dipping directly into consumer bank accounts by using unsigned checks and ‘payment orders’ that have been ‘remotely created’” and (ii) “bar[ring] telemarketers from getting paid with traditional ‘cash-to-cash’ money transfers, as well as ‘cash reload’ mechanisms.” Public comments on the proposed amendments to the TSR will be accepted until July 29, 2013. More information is available here.
  • The FTC has announced a public workshop to be held on November 21, 2013, in Washington, DC to address the consumer privacy and security issues raised by the growing connectivity of consumer devices such as smart phones, cars, appliances, and medical devices, also commonly referred to as “The Internet of Things”. More information regarding the “Internet of Things” workshop and comments is available here.

New Markets: Smart Grid and E-Health

  • The mHealth Alliance has released a report titled “Patient Privacy in a Mobile World” that includes a global analysis of existing health data privacy laws. It examines “major aspects of current laws to provide a snapshot of where the laws stand today and a baseline for discussing potential reform and the adoption of new laws.” The report is available here.
  • The U.S. Department of Energy (DOE) has released a new report called “Voices of Experience: Insights on Smart Grid Customer Engagement” that compiles information on the successful approaches used by electric utilities to engage customers about smart grid technology and deployments. The report is the result of a series of regional smart grid Peer-to-Peer Workshops convened by the DOE during 2011 and 2012, and responds to consumer criticism and misinformation surrounding smart grid. Its aim is to create a stronger utility-customer relationship. The DOE also has created the Smart Grid Customer Engagement Working Group to capture the knowledge that utilities have gained during the initial phase of smart grid technology deployment. “Voice of Experience” is available here.

Developments in Intercarrier Compensation

  • On July 9, 2013, the New Hampshire Public Utilities Commission (NHPUC) issued an order suspending its decision to regulate Comcast’s provision of cable voice service. See July 1 edition of This Week in Telecom. The NHPUC’s previous decision was issued despite the enactment of a new law in 2012 that restructured telephone regulation within the state and prohibited regulating the market entry, market exit, transfer of control, rates, terms, or conditions of any VoIP service or IP-enabled service. The New Hampshire Supreme Court instructed the NHPUC to reevaluate its previous decision in light of the new law, and Comcast and other VoIP providers argued that the NHPUC’s previous order was unenforceable as a result of the new regulatory regime. After the NHPUC reaffirmed its decision, both houses of the New Hampshire legislature passed new legislation, yet to be signed by the governor, stating that “no department, agency, commission, or political subdivision of the state, shall enact, adopt, or enforce, either directly or indirectly, any law, rule, regulation, ordinance, standard, order, or other provision having the force or effect of law that regulates or has the effect of regulating the market entry, market exit, transfer of control, rates, terms, or conditions of any VoIP service or IP enabled service or any provider of VoIP service or IP-enabled service.” In its decision to suspend its previous decision, the NHPUC stated that it would serve “judicial economy and administrative efficiency” to reconsider its previous decisions should the governor sign the bill into law. Docket Nos. 09-004, 12-308.

Compliance Notes

  • Form 499-Q is due August 1, 2013, for all filers that are not considered de minimis for Universal Service filing purposes. This filing encompasses historical revenues from the second quarter of 2013 and projected revenues for the fourth quarter of 2013. A copy of the current FCC Form 499-Q can be found here.

Voice over Internet Protocol (VoIP) providers and Commercial Mobile Radio Service (CMRS) providers who rely on traffic studies to report interstate revenues on FCC Form 499-Q must submit these studies by August 1, 2013, to the Universal Service Administrative Company (USAC) and the Chief, Industry Analysis and Technology Division of the FCC.

  • Providers of international common carrier services are required to file their International Traffic Data report for 2012 by July 31, 2013, as required by Section 43.61 of the Commission’s Rules. There is a change in filing protocols for resellers of telecommunications services, providers of miscellaneous telecommunications services, and providers with less than $5 million in international revenue. These providers may report their information via transmittal letter, as outlined in Public Notice issued by the FCC, found here.

All other carriers are required to file complete reports pursuant to the current filing manual which can be found here. A copy of the billing codes for switched services settlement arrangements can be found here. (DA-13-1436).

  • The Universal Service contribution factor for the second quarter of 2013 is 15.5%. A copy of the Public Notice announcing the rate can be found here. (DA 13-422)
  • The FCC has proposed a Universal Service Fund contribution factor of 15.1% for the third Quarter of 2013. A copy of the Public Notice announcing the rate can be found here. (DA 13-1361)

Broadband News

  • As reported above in FCC Announcements, the FCC will vote a Notice of Proposed Rulemaking at its upcoming July 19 Open Meeting to address modernizing the E-Rate Program to increase access to high-speed broadband and digital learning technologies for schools and libraries. The item is described here.

In the Courts

  • On July 11, 2013, the Court of Appeals of Georgia took Fast Sign Company’s Telephone Consumer Protection Act (TCPA) case against American Home Services, Inc. (AHS) into its second decade of activity by vacating the $459 million judgment against AHS and remanding the case to the trial court for further proceedings. The trial court had held that AHS sent 306,000 unsolicited advertisements to fax machines, including to class representative Fast Sign. The court deemed those activities a willful violation of the TCPA resulting in trebled damages of $1500 per fax. In an earlier appeal, the Georgia Supreme Court held that TCPA is violated when the defendant attempts to send an unsolicited fax, regardless of whether the transmission was completed or received. On remand, the intermediate appellate court had to rule on the remaining appellate attacks leveled by AHS. This time, the appeals court agreed that the trial court incorrectly failed to “exclude fax recipients who were excluded from the class” and did not adequately define the class. Specifically, the appeals court found that the trial court failed to take into account the fax recipients with whom AHS had an established business relationship, plus typically excluded parties such as court personnel and party employees. The court rejected, however, AHS’s argument that its violation of the TCPA was not “willful” and thus could not trigger the trebling of damages. The court held that “AHS admitted that it hired [fax advertising company] to send advertising faxes on its behalf. This is sufficient to make the violation ‘willful’ within the meaning of the [TCPA].” The case, filed in 2003, was remanded to the trial court to revise the judgment accordingly. Am. Home Svcs., Inc. v. A Fast Sign Co., No. A11A0719 (Ga. Ct. App. July 11, 2013).

Legislative Outlook

  • The Senate Consumer Protection Subcommittee will hold a hearing titled “The Expansion of Internet Gambling: Assessing Consumer Protection Concerns” on July 17, 2013, at 10:00 am ET in 253 Russell. More information is available here.
  • Also on July 17, the full Senate Commerce Committee will hold a hearing titled “E-Rate 2.0: Connecting Every Child to the Transformative Power of Technology” at 2:30 pm ET in 253 Russell. For more information, click here.
  • The House Subcommittee on Commerce, Manufacturing, and Trade will hold a hearing titled “Reporting Data Breaches: Is Federal Legislation Needed to Protect Consumers?” on July 18, 2013, at 10:00 am Eastern in 2123 Rayburn. For more information, click here.